Preston - In August, First Selectman Robert Congdon thanked Gov. Dannel P. Malloy for being the first governor in 16 years to actually come and visit the site of the former Norwich Hospital and see what condition the state's neglect had left it in.

That visit in the pouring rain is now being credited for helping the town obtain up to $5.5 million in state grants and loans to help clean up the property.

On Friday, the state Bond Commission is expected to vote on a $1 million grant request made to Malloy by Preston's two state legislators, Rep. Tom Reynolds, D-Ledyard, and Sen. Andrew Maynard, D-Stonington.

The Bond Commission grant would cover the remediation cost and demolition of four buildings on the site, the legislators said, and would make good on comments made by Malloy that the state has an obligation to help Preston tackle the estimated $30 million cleanup bill.

Town officials also learned last week that the state Department of Economic and Community Development had approved a $500,000 brownfields grant to help clean up the site and a low-interest loan of up to $4 million. Preston would have to match the loan dollars at an even split, but there is no matching requirement on the brownfields grant.

DECD also agreed to cover the town's insurance on the cleanup job, a savings not enumerated but much appreciated by town officials.

"It's definitely all about money to get these buildings remediated and get the property ready for vertical developments," Congdon said.

Preston officials are negotiating with two developers who have submitted development proposals for the property, renamed Preston Riverwalk. Congdon estimated private negotiations will continue for another few weeks before plans can be presented to the public.

Any grants the town receives for the cleanup helps the town's negotiating position, Congdon said.

The state announcements mark the first state contributions to the town's cleanup costs for the former state mental-illness institution that closed in 1996 and lay vacant for more than a decade before Preston agreed to assume ownership in 2009. By then, vandals and thieves had raked most of the valuable metals and contents from the abandoned buildings, and neglect led to quick decay.

Officials have determined that nearly all the historic buildings must be demolished.

"We are extremely pleased by the one million in state bond grant money and very grateful and pleased with the recent approvals for the brownfields applications," Preston Redevelopment Agency Chairman Sean Nugent said. "These monies will certainly allow us to progress with significant abatement and clean-up on the site."

Nugent credited the volunteer work of PRA member Jim Bell, Town Planner Kathy Warzecha and Jim Olsen of the grant consulting firm Tighe & Bond for "their tireless and committed efforts" on the brownfields applications.

"I cannot thank Representative Reynolds, Senator Maynard or the governor enough for their support and inclusion of us in the submission to the Bond Commission," Nugent said.

"I think the governor in his tour and visit and in the questions he asked indicated he understood it had been an egregious example of neglect on the part of the state," Maynard said. "All of that aside, he basically understood there was extraordinary potential there, and a measure of state assistance was appropriate, and we would pursue that in each of the various categories we had."

Preston hasn't been successful in every category. Town officials recently learned they did not receive a Small Cities grant for the hospital property, in part because the project did not include an affordable-housing component.

The town is awaiting word on another $500,000 Small Town Economic Assistance Program grant through the state Office of Policy and Management.

Any state or federal grant Preston receives helps with future applications, Congdon said. Preston can use federal grant amounts as part of any required matching share for state grants and loans.

To date, Preston has received $950,000 in federal Environmental Protection Agency grants and has matched that with $120,000 in town money. That makes a total of $1,070,000 already in hand as matching funds for the $4 million DECD loan.

The state's new support could provide an intangible boost to the Preston Redevelopment Agency's new applications filed last week for four federal grants totaling another $950,000.

"One of the concerns the EPA had was that they and the town were partners, but they voiced concern that they hadn't seen significant participation by the state," Congdon said. "Now we can show that the state is participating in a significant way."

Still more grant momentum could be coming Preston's way. The Southeastern Connecticut Enterprise Region recently completed the region's Comprehensive Economic Development Strategy report. In that plan, the $30 million cleanup of the former Norwich Hospital property tops the list of "vital municipal projects." The plan was mailed Monday to the U.S. Economic Development Administration, said Deb Donovan, seCTer economic development and marketing director.

The grant application required a completed CEDS report for the region, Congdon said, which means that Preston can now apply for EDA grants.

"It positions us well for applying for federal funds for that project," he said.

c.bessette@theday.com